Failing Health Care Co-ops Will Cost Taxpayers

Consumer Operated and Oriented Plan Programs (COOPs) were really a political compromise between Members of Congress who wanted a public plan option and those who didn’t. Once the Affordable Care Act passed, COOPs had outlived their usefulness. However, they are now failing and will cost taxpayers plenty. Senior Fellow Devon Herrick testified before a congressional committee.

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"Change in Welfare Caseloads, As of July 1997," Administration for Children and Families, Department of Health and Human Services.

An important new study by Thomas L. Gais, Donald J. Boyd and Elizabeth L. Davis analyzes some of this spillover effect; "The Relationship of the Decline in Welfare Cases to the New Welfare Law: How Will We Know If It Is Working?" Nelson A. Rockefeller Institute of Government, State University of New York, Albany, N. Y., August 19, 1997.

Christopher Georges, "U.S. Tightens Grip on States' Ability to Run Their Own Welfare Programs," Wall Street Journal, November 18, 1997; and James Bennet, "Clinton Urges Companies to Hire Off Welfare Rolls," New York Times, November 18, 1997.

A September 1997 survey by the Associated Press found that only 17 states expected to meet the federal law's work requirement for two-parent families by the deadline. Jason DeParle, "Half the States Unlikely to Meet Goals on Welfare," New York Times, October 1, 1997.

"Change in Welfare Caseloads, As of July 1997."

For example, Gais et al. suggest that there is "general agreement that a 1 percent increase in the unemployment rate could lead to a caseload increase of between 2 - 5 percent." While that relationship is significant, it could not explain the wide variations experienced by several states.

"Summary of Selected Elements of State Plans for Temporary Assistance for Needy Families as of August 12, 1997," NGA Center for Best Practices, National Governors Association.

For example, Oregon's Administrator of Adult and Family Services, Sandie Hoback, credits "bipartisan support for the state's unique brand of welfare reform" as a primary reason for the state's success. Statement from the Oregon Department of Human Resources, August 7, 1997.

While a strong economy can be helpful, it also can be a hindrance to real welfare reform. In a good economy states experience a certain decline in their caseloads even if they do nothing - which lets politicians take credit for the declining caseload without suffering the political pain of reform.